I am often asked which investing books investors and members of the public should read, so I have copied the list below.
For those that don’t like reading, I would suggest trying the free trail for Audible (audio books) and listening to them on your way to work or at home. Usually you can listen to 2 books for free.
In terms of the specifics, I would recommend starting with three books:
- A great book for beginners as Stanley will challenge a lot of your misconceptions about who the rich really are. They probably don’t earn as much as you think they do.
- They may be living in the same street as you.
- Not the most academic book, but very accessible and even handed.
- As per the title on the book, Warren Buffett believes this book is by far the best book on investing ever written.
- It is a bit outdated from the point of view that it was written before index funds. It was written before institutional investors and robots made it so hard to beat the market. It was written before value investing become so hard — but still a great read.
- A great book on human nature and investing, even though only 1–2 chapters focus on investing.
- There are many fat doctors in the world. And there are many financial experts who speculate too. This book examines some of the reasons why human nature contributes to bad investment outcomes.
The following Investment books are also excellent:
Buffett speaks about some of the lessons he learned from Benjamin Graham , his mentor, and from all the years in business. He speaks about knowing businesses well, a circle of competence and other key ideas in the book.
Link To Buy:
Burton speaks about how some popular investment techniques, such as technical analysis and fundamental analysis, don’t work long-term.
Paul Farrell — The Lazy Person’s Guide to Investing: A Book for Procrastinators, the Financially Challenged, and Everyone Who Worries About Dealing With Their Money
One of the best books for understanding how to invest safely, with little time commitment, and productively.
One of Buffett’s favorite books. In fact in the late 80s, Buffett identified this book as being one that influenced his investment strategy.
Buffett claims he is 85% Graham Graham and 15% Fisher. Like Graham’s books, however, this book was produced in 1958. So many of the teachings are outdated. For example, index funds weren’t available at that point.
Another excellent book for beginners. They teach about how to focus on the long-term and not short-term. They show how discipline is one of the keys to success
Larry Swede explains the differences between active and passive investments and the studies that show why passive investments can outperform active.
Explains in more details how most people who try to outperform markets, fail
John Bogle, The Little Book of Common Sense Investing : Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
Arguably Bogle’s most famous book. He speaks about costs, being long-term, what drives markets long-term, compounding returns and so on.
A down to earth books that looks at the 4 keys to a good investment portfolio . Importantly the books speaks about the dangers of actively picking stocks, as opposed to investing in the whole market and the behavioral finance and how state of mind can adversely affect decision making
Bogle speaks about the main pillars of indexing in this book
Bogle speaks about how the rise of ETFs has lead to many so-called passive funds being used to speculate. He notes how high frequency trading has lead to extra income streams of financial institutions.
Most interesting about this book is how he notes that, in the 90s and 2000s, most banks lobbied to prevent trading costs going down. They stopped lobbying! And the reason is that they realized that traders and speculators, trade more, if trading costs are lower.
Swensen challenges some of the widely held beliefs people have in this book. He also looks at some of the evidence on mutual fund performance.
Buffett’s mentor Graham produced another classic with securities analysis. Arguably a better book for intermediate learners, as opposed to beginners
Richards speaks here about some of the behavioral reasons investors fail. Too many people assume that lack of knowledge is why investors fail, when behavior is usually number 1.
In this book, I summarize some of the evidence for beginners and intermediate learners. I practically focus on the importance of spending and investing habits, financial advice for expats and getting wealthy on a middle-income.
All the books above are available on Amazon or, in some cases, by PDF. Audiobooks and reviews are widely available online as well.
For more academic work on how the 4% rule works in practice, I would recommend the following:
Sustainable Withdrawal Rates From Your Retirement Portfolio, by Philip L. Cooley, Carl M. Hubbard and Daniel T. Walz .
Other Academic Books To Look At Include The Following.
Bengen, W. P. (1994). Determining withdrawal rates using historical data. Journal of Financial Planning, 7(1), 171–180.
Bengen, W. P. (1996). Asset allocation for a lifetime.Journal of Financial Planning, 9(3), 58–67.
Bengen, W. P. (1997). Conserving client portfolio during retirement, part III. Journal of Financial Planning, 10(5), 84–97.
Bierwirth, L. (1994). Investing for retirement: using the past to model the future. Journal of Financial Planning, 7(1), 14–24.
Cooley, P. L., Hubbard, C. M. & Walz, D. T. (1998). Retirement spending: choosing a sustainable withdrawal rate. Journal of the American Association of Individual Investors, 20(2), 16–21.
Ferguson, T. W. (1996). Endow yourself. Forbes, 157(12), 186–187.
Ho, K., Milevsky, M. & C. Robinson. (1994). Asset allocation, life expectancy, and shortfall. Financial Services Review., 3(2), 109–126.
Ibbotson Associates (1996). Stocks, bonds, bills, and inflation yearbook. Ibbotson Associates, Chicago, IL.
Ibbotson Associates (1998). Stocks, bonds, bills, and inflation yearbook (CD-ROM V ersion). Ibbotson Associates, Chicago, IL.
Lynch, P. (1995). Fear of crashing. Worth 2(1), 79–88. Scott, M. C., (1996). Assessing your portfolio allocation from a retiree’s point of view. Journal of the American
Association of Individual Investors. 18(8), 8–11.
Some Non-Investing Books That I Found Useful.
To understand human behavior, which indirectly affects investing choices and often leads to bad choices, I would suggest the following books:
In Carnegie’s books, he speaks about how people need to feel important. That is usually. It is human nature, and isn’t always a bad thing. It can be a bad thing, however, because investors with bigger egos take more risks. They speculate more. They stock pick. So even though this isn’t an investing book, it does have many warnings for the average investor
Doesn’t talk about investing, but does show that volatility and stability aren’t linked
A good book for productivity and getting things done.